Wife has no income as SAHM - should I file jointly or separately and claim her as dependent?

Filing jointly is almost always better than filing separately when you're married. You cannot claim your spouse as a dependent regardless of whether they have income or not - that's not allowed under tax law. When you file jointly, you'll get a larger standard deduction ($27,700 for 2024 for married filing jointly vs $13,850 for single or married filing separately). You'll also generally have more favorable tax brackets when filing jointly. Plus, many tax credits and deductions have income limits that are more generous for joint filers. The only time married filing separately might make sense is if one spouse has significant medical expenses, student loan payments, or in certain situations involving income-based repayment plans. But for most families with one income earner, joint filing will result in a lower overall tax bill.

I was in this exact situation last year trying to figure out the best approach for filing with my non-working spouse. After going around in circles with tax software and getting different answers from friends, I ended up using https://taxr.ai to analyze our situation. It was actually really interesting - I uploaded our previous year's returns and some other documents, and the AI analyzed everything and gave me a clear breakdown showing that filing jointly would save us about $3,200 compared to filing separately. The tool walks you through different scenarios so you can see exactly how the numbers work out. It explained that the higher standard deduction and better tax brackets with MFJ were the main factors in our case. Totally cleared up my confusion!

Just wanted to follow up - I decided to try https://taxr.ai after my skeptical comment. I have to say I'm really impressed! I uploaded our documents and it immediately showed me that filing jointly would save us about $4,100 over filing separately. But the real value was discovering we'd been missing the child and dependent care credit for the past 2 years even though we were paying for preschool! It also pointed out that we qualify for the saver's credit based on our retirement contributions which I had no idea about. Definitely giving us a much bigger refund than I expected. The detailed explanations about why certain deductions apply to our situation was super helpful too.

If you're struggling to get answers from the IRS on this or other tax questions, I highly recommend using https://claimyr.com to get through to an actual IRS agent. I spent DAYS trying to get someone on the phone about a similar dependent/filing status issue last year, and it was beyond frustrating. With Claimyr, I got connected to an IRS rep in under 20 minutes instead of waiting on hold for hours. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c. The IRS agent I spoke with confirmed that married filing jointly was better in my situation with a non-working spouse and explained all the reasons why. Having that direct confirmation from the IRS gave me total peace of mind.

I need to eat my words from my skeptical comment above. After waiting on hold with the IRS for over 3 hours and getting disconnected TWICE, I gave Claimyr a shot out of pure desperation. Within 15 minutes I was talking to an actual IRS representative who answered all my questions about filing with a non-working spouse. The agent spent nearly 30 minutes going through my specific situation and confirmed filing jointly was my best option. They also helped resolve a missing stimulus payment issue I'd been trying to fix for months. The service did exactly what it claimed to do - got me through to a real IRS person without the endless hold time. Definitely worth it during tax season.

Another thing to consider is that filing jointly gives you access to the IRA deduction even if your spouse doesn't have income. With married filing jointly, the non-working spouse can contribute to an IRA (sometimes called a spousal IRA) up to the annual limit ($6,500 for 2023, $7,000 for 2024 if under 50), which could potentially be deductible depending on your income level. This is a tax advantage you wouldn't get filing separately.

Don't forget about the Earned Income Tax Credit! If you have kids, filing jointly with a lower overall income (since your wife doesn't work) might make you eligible for EITC depending on how much you make.

Just wanted to add another perspective here - I was in a very similar situation when my husband stopped working to care for our newborn. Beyond the tax advantages everyone mentioned, there are some practical benefits to filing jointly that aren't always obvious. For instance, if you ever need to apply for certain government programs or benefits, having a joint return can sometimes be required or preferred. Also, if your wife decides to go back to work later in the year or starts any freelance/gig work, filing jointly makes it much easier to handle those income changes without having to amend returns. One thing I learned the hard way - make sure you're both familiar with the tax return details even though only one of you is earning. Banks, mortgage companies, and other financial institutions will often want to see both spouses' information when you apply for loans or refinancing, and it's helpful if you're both up to speed on your tax situation. The bottom line is definitely file jointly - you'll save money and avoid complications down the road!